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Charity expenses versus funding the cause

People who decide to donate to various charitable groups want to ensure as much of their donations as possible are going to people who need help. Ensuring that a charitable group will disperse donations properly involves research and follow-up.

No one wants to think that a charity is not working in the best interests of its proposed benefactors. Unfortunately, each year organizations masquerading as nonprofits defraud donors and rob the needy of help they desperately need, while other seemingly reputable organizations devote far too much of their budgets on fundraising and executive compensation.

It's a fine line with regard to which expenses are necessary to foster the work of the charity and which may be deemed excessive. To make an impact with giving, consider these pointers.

• Read up on the Better Business Bureau Wise Giving Alliance Standards for Charity Accountability. The BBB developed these standards to help donors make sound giving decisions. The standards measure effectiveness, fundraising, governance, and production of informational materials.

• Do not use overhead costs alone when determining if a charity is legitimate. Instead, donors should consider the entire picture of the charity's impact rather than what it spends on operational costs.

• Don't necessarily believe the hype. In August 2017, social media attacks called into question the efficacy of the American Red Cross concerning disaster relief efforts following Hurricane Harvey, which hit areas of Texas and Louisiana very hard. While there may be some validity to complaints found online, people should not base their assessment of charities only on hearsay. Rather, they should do their own investigations.

• There is no magic ratio that identifies how much should be spent on fundraising and other operational needs versus what percentage is actually spent on programs, grants, cash awards and research. It is up to each individual to weigh the benefits of a charity against their own criteria for giving. One nonprofit that spends more actually may have a better impact than another that spends less.

Charitable giving is a personal choice, and prospective donors should exercise due diligence before donating to charity.